Why Building a Community Prevents Subscription Cancellations
by Felix Thea Podcasts Jun 11, 2019 31 minute read Leave a comment Email Pinterest Facebook Twitter LinkedIn
Adrian Wood went from making music on his laptop to producing for the likes of 50 Cent, Snoop Dogg, and Eminem.
Beyond catchy composition and rhythm with a hook, he discovered that there were many hopeful producers who lack access to digital assets like drum kits or synth loops to create the songs they had in their minds. Ever since joining Modern Producers as the CEO in 2013, Adrian is on a mission to deliver these digital assets to up-and-coming producers and has built a loyal community of monthly subscribers and outsourced almost all of the content production.
In this episode of Shopify Masters, you’ll learn from Adrian of Modern Producers on how he built a sustainable business selling digital products through a subscription model.
One of the most important financial backbones of any business is recurring revenue and if you’re 100% reliant on your day-to-day ecommerce sales, that can be really hard for planning for the future.
Tune in to learn
How Modern Producers went from 15-20% open rates to 80% open rates with Facebook messengerWhy you should limit the time customers can join your subscription programWhy his customers almost never leave his subscription programDon’t miss an episode! Subscribe to Shopify Masters.
Store: Modern ProducersSocial Profiles: Facebook, Twitter, InstagramRecommendations: Manychat (FB messenger), Clickfunnels,
SendOwl (Shopify app),
Boost Sales, Countdown Timer Bar (Shopify app), Refersion (Shopify app), Smile (Shopify app)
Felix: Today I’m joined by Adrian Wood from Modern Producers. Modern Producers sells high-quality production tools for the modern music producer and was started in 2015 and based out of Los Angeles, California and has annual revenues of 1.1 million. Welcome, Adrian.
Adrian: Hey Felix, thank you for having me. I appreciate it.
Felix: Yes, so you mentioned to me that you have had a decade and a half of experience working in the music industry and you’ve had your own personal goals which you have achieved. And what motivated you to start this business was because you wanted to help other artists and producers achieve success and become a self-made entrepreneur. Tell us about this. Tell us first about your experience in the music industry and how it led you to where you are today with Modern Producers.
Adrian: Sure so essentially before I started Modern Producers, I was already in the music production industry and I actually produced records for people like 50 Cent, Snoop Dog, Rick Ross, Tech N9ne and also companies like Coca Cola, Ford, Nike, the NBA, the NFL. And I still actually am the head of Anno Domini Nation. We’re basically an independent music production company that helped to pioneer the licensing of instrumental music online for artists and also for advertisers and TV and film productions.
Adrian: We’ve actually been fortunate enough to win numerous awards and accolades over the years, including a few platinum plaques for album sales. And essentially the way that Modern Producers came about was that I really wanted to find something to give back to the music production community and kind of level the playing field between and up and coming independent producers like I was and the big league industry players, by giving everyone access to the same high-quality sounds and tools at affordable prices.
Adrian: So obviously having worked in the music industry for a long time, almost a decade and a half now, and having sort of achieved my personal goals. What really motivates me today is actually helping other artists and producers achieve success and like you said creating more self-made entrepreneurs. You know nowadays there’s such amazing opportunities in music and it’s never been as fast and democratized as it is today through the Internet and E-commerce and all these different ways of reaching out to fan bases and artists and labels and so on. So in a way Modern Producers, I see it as almost my legacy in helping to move the music production community forward. And of course one of the test factors behind any music producer is having access to the right sounds.
Adrian: So I guess the big secret in a way in the music industry is that a great many hits are based on just a handful of select high-quality software presets and go to drum and instrument sounds, that the major producers are using. So I don’t know if you ever got this, but sometimes when you’re listening to the radio in the car, you’ll notice that a large of the chart hits, they sound kind of similar right?
Adrian: And it’s because a lot of these big producers are actually very similar sounds and presets. So obviously having access to these sounds is very powerful and it’s a way of sort of turning an amateur producer into a radio-ready producer and that’s why basically with Modern Producers we really seek to create products that provide that gateway for up and coming producers to have access to the same top-quality sounds.
Felix: Got it. So when I’m on your site you have tons of categories. Lots of products that you’re selling on there. I’m assuming when you first started out, you did not have such a wide catalog. How did you decide what was most important to focus on first for you to accomplish that goal of helping self-made music entrepreneurs?
Adrian: Yes, so obviously having a background in the music industry helps and just feeling out what the trends are, what the needs are, what the requirements are for other producers. And so initially when I got started like any good entrepreneur should, I just started thinking about what would I need? I put myself into the position of our customers and decided what would I need as an upcoming producer to get started and really help me on my way? So the first couple of products were essentially just stuff that I liked and that I thought was useful. And then obviously as the business grew, as we started adding more vendors, more products, we could analyze trends better and see what was selling well. What people were asking for more. And we went from just a handful of products. I think we had maybe 20 to start with and most of them were created in-house. Today we have 70 vendors who have created over 2000 products for us that we’re selling in our store.
Felix: Got it, so these vendors, these 70 vendors that you now have today, what made you decide that that was the direction that you wanted to move towards rather than just kind of creating these things in-house, almost become like a platform for these vendors to also, to offer their products for sale. What made you decide to go in that direction as well?
Adrian: I think I realized early on that first of all in order to scale we needed to bring on products externally. Because, it just wasn’t feasible creating everything in-house, because it takes a lot of time and a lot of research and development and a lot of money to create products from scratch. And essentially I realized like my time was better used in business operations and marketing and actually moving the business forward, instead of just sitting in front of a computer and creating content for days or weeks at a time. So I started just researching the best vendors and the best sound designers out there and working with them. And we just sort of grew from there.
Felix: Yeah, when you made the shift from a kind of in production mode and creating products to almost becoming like a retailer for these vendors, how did this change how you structured your business and your time?
Adrian: I mean it had a profound impact on the amount of time I was able to dedicate to things like business development and reaching out and growing our customer base, because in the early days 90% of my time was just creating content and I think for any entrepreneur you should try and get to a place where you’re working on your business, not in your business. I’m sure you hear that all the time from …
Adrian: Shopify owners. But I realized I was just spending too much time working in my business rather than expanding and growing. So it definitely had a big impact and also obviously it grew a customer base because we went from being a very niche site just with a handful of products. Back in the days we mainly just catered to hip hop artists, because that was obviously my background, as well as a music producer. To now essentially catering to every type of genre there is from R&B to electronic to house music, to rock, you name it.
Felix: Hmm. Would you have gone straight to vendors if you were to do this all over again or did you feel like it was almost a pre-requisite to build in-house first?
Adrian: I think it was definitely valuable developing some things in-house because it gave me a sense of what am I looking for in terms of quality. It also gave me a better appreciation of how things should sound. How the products should be designed, but eventually I think it’s pertinent to move to a model where you’re not creating everything in-house fairly quickly and actually it’s the same thing that I did with my music production business too. Because eventually, I went from just a one-man operation to having ten producers working for me.
Adrian: And I think it’s great as an entrepreneur if you can get to a place where you’re essentially selling other people’s products, but making a profit on that, because it frees up your time massively. Again it makes it so much easier to expand and grow and really focus on the things that are going to move the business in a future-facing direction.
Felix: Right. I think a lot of entrepreneurs are our makers in this shift to becoming a business owner where you’re selling other’s products and you’re spending more time on business development and creating these relationships and less time on the actual making of the product that is being sold. It is a big shift for a lot of entrepreneurs and some people, it might not be the right shift for some. Because you’re on the other side now, you’ve made this transition, what kind of advice would you give someone where they’re kind of on this crossroads, where they can decide, should they continue just kind of being a maker versus more towards a business owner. What kind of questions do you ask yourself to determine which path you should take?
Adrian: Well listen first of all. I definitely understand that feeling, because I’m definitely someone who is very hands-on and actually the biggest struggle I’ve personally had as an entrepreneur was, in the end, to give away some sort of share of control in the business, honest. But honestly, that’s the only way essentially that you’re going to end up growing, because there’s always going to be bottlenecks and the bottleneck is you. You’re in charge of everything if you’re doing the marketing, product creation, the business development. You know there’s only so many hours in the day. So eventually for the business to really take off and grow you need to start outsourcing. So I think that’s a really valuable lesson for any entrepreneur to learn.
Adrian: And sure enough when you’re first starting out I think there is definitely a lot of value in being a one-man show and just at least having a basic understanding of every operation in the business. But fairly quickly you should seek to transition and not necessarily hire, but at least contract some of the work out.
Felix: So was this a new, I guess you already said you went through this process when you had your music production business where you make this transition. What new skills did you feel like you had to develop to transition smoothly into this new role?
Adrian: Well there’s a world of difference between being a good content creator and or being in my case a good music producer and then being a good manager of the team or leader of the business. There’s definitely a lot of skills that need to be learned like I said delegating responsibility. Hiring the right people, that’s definitely a process. I think initially I just found whoever was cheapest and available, but I quickly realized that honestly it just ends up costing you more money trying to save money on labor, if that makes sense. Because you end up spending so much time retraining new people because the other people didn’t work out. So I think it’s best to just really find the right person for the job in the first place, even if you’re paying a premium.
Felix: Right. What’s your process for that? How do you determine if someone is essentially worth the money that you’d pay them?
Adrian: Well, we usually start out with hiring somebody just on a short term basis as a trial period to see if he works out and I think aside from obviously the know-how and the skills it’s really important to us to find people who are friendly. Who fits into the culture of our organization, because we’re all very open and kind and helpful people. So that’s kind of the ground basis of what we do. Especially with an E-commerce platform, obviously a big part of it is also customer satisfaction and dealing with customers, so we definitely want someone who is open and helpful in that sense.
Felix: Got it. So let’s kind of rewind to the beginning. So it’s been about four years now since you started a business and now you have a million dollar a year business. Is that first year what was that like?
Adrian: So I think early on, the only real struggle we had was figuring out exactly what we wanted to do and who we wanted to cater to, so really carving out our niche in the market. When we first launched the business we noticed a real lack of websites for music production tools that married choice and affordability with quality. So there were obviously other players in the market already and some were doing very well as well. It’s not like we reinvented the wheel or anything like that. And honestly, you shouldn’t have to as an entrepreneur. You don’t always want to be that first guy charging into the battlefield with all the arrows in his back, you know. We found that our competitors, they either provided masses of most cheap, low-quality products and overwhelmed customers, or they had a really limited selection of a few, very expensive, high-quality products that only covered the needs of a small part of the market.
Adrian: So we really just set out to take advantage of that and do it better. And of course, there were hiccups on the way. There always is going to be. Things like lost data and lost code and website crashes. You know all that usual stuff and also dragging our feet on rolling out features and tools that I really wish we’d implemented from the start.
Felix: Right, so you found this kind of product market fit where you’ve recognized there was a market for kind of almost like a mid-tier player where there is a lot of scale, lots of options, a lot of products that you can sell, that you can offer, but then when it comes to the product side, actually sourcing all of this product. Would that already exist? Like how hard was it to build the product side of this business when you first started?
Adrian: Yeah, so like I mentioned there were a few players already in the market who were million-dollar companies and were doing well. So obviously, initially we had to find a way to differentiate ourselves and I think one of the ways we did that initially and the way that we sort of connected with an audience was that we treated our customers like a community and we built a lot of goodwill by hosting contests and giveaways and special offers and things like that. And really those kind of brand building kind of exercises initially were invaluable to us. For example, we came up with this Cookup Contest Series where we created a special product containing exclusive sounds and samples. And then producers download the product and were asked to create a composition using only the sounds from that specific product.
Adrian: And then, of course, the composition using only the sounds from that specific product and then, of course, the compositions are chosen and prizes awarded, everything from cash to products and so on. And that really proved to be super popular and was an awesome way to get people into our community from outside and it created a whole lot of fall out, buzz and boosted traffic. And that was something that nobody else was doing at the time, so all these other players in the market, they were just E-commerce platform and that was kind of the be-all, end-all of it. So we really wanted to marry that with creating a sense of community within the music production audience.
Felix: And this was a kind of marketing community building strategy that you used from the very beginning?
Adrian: Yeah, absolutely. So that was one of the ways that we initially got a lot of traffic and a lot of our audience to come to our site, so obviously being privileged in the sense that I already had a connection through the music production community, through the music production business that I run, that was helpful in attracting people also to the business and then really we promoted the contest really hard on social media and things like that. And yeah, actually outside of organic traffic, our biggest source of traffic was initially social media and still is. So we always really try to identify and engage with the audience on social media to be organic and also sometimes paid means and also through e-mail and Facebook Messenger marketing.
Felix: Got it. We’ll touch into that in a bit. So when you were sitting down to decide you mentioned, you just wanted to decide who was the target audience? Who did you want to cater to? I think what one of the most common mistakes is that an entrepreneur comes along and they think that why not sell to everyone? I want everyone to be my customer, but you decided specifically to focus on a, carve out a particular piece of the market. How did you figure this out? How did you know that that was what you wanted to do, rather than following in the footsteps of what’s already been out there, where you have these kinds of high end, but very limited selection, kind of marketplaces or I guess you probably didn’t want to go for a low end, but like what made you decide to stay away from doing what was already out there?
Adrian: I think one really important thing for every entrepreneur to learn is that if you try to cater to everyone you just end up catering to no one. You really have to drill down on the specifics of who your, who your customer avatar is. So who is the person who’s going to come to your site and buy the products? What does he want? What are his needs? And also figure out what’s already being catered to in the marketplace and where are there gaps you can take advantage of? Because what ends up happening if you try to please everyone is that you just overwhelm them with choice or you’re not specifically addressing the needs of certain people. So it’s really hard for marketing and promoting and so on.
Felix: To you what is the most important attribute of your customer avatar? Is it like someone that you can imagine that you would like? Is it someone that you think is not being served? But what is the most important kind of question, I guess you can throw your avatar against. How do you decide? You know I think what you’re saying makes sense, right? You don’t want to cater to everyone. But you’ve got to pick one type of avatar that you focus on. How do you know which one to pick?
Adrian: I think in order for you to maintain motivated in the long term, you’ve really got to find your dream customer. So you’ve got to figure out who you enjoy working with and who you enjoy serving. So for me coming from an independent music background, it was really that independent music producer. So not necessarily the big major label artists and producers, but the guy who is just starting out maybe on the laptop in his bedroom with big dreams. So that’s kind of the scenario that motivates me because that’s where I came from and I realized that that target market was kind of underserved. So a lot of the sites were essentially catering to either the professional producers with big budgets or then to offer really masses of low-quality products to amateur producers. So I really wanted to step it up and give the same high-quality tools to the amateur crowd.
Felix: So you mentioned that social media promotion just in general has been, has attributed a lot to your growth even to this day, but particularly you said that you promoted the content and the community building, at community building events basically on social media. What kind of channels worked the best for your industry?
Adrian: Yeah, so we, like we said we did a lot of giveaways and contests and we also did some advertising through Facebook mainly. We promoted some giveaways. For example some free drum kits, some free sound tools. And that definitely helped to initially grow our audience and once we had that audience we really engaged with them through e-mail marketing and also Facebook Messenger marketing more recently. Which is, by the way, an amazing tool if you’re not using Facebook Messenger, I highly recommend checking it out. We went from kind of 10-15% open rates and 2-5% click rates to more like 80-90% open rates and 10-20% click rates. So it’s a huge difference. Obviously, audiences are much more engaged and more likely to read Facebook Messenger notification than they are e-mails. So that definitely recently helped us to grow our revenues and engage with our audience more effectively.
Felix: Got it. So break down this kind of funnel for me. So, someone, you might advertise on Facebook. You drive ads to for a free drum kit or something. Then they come and they opt into an e-mail list. You get the drum kit and then that’s where you’re able to market to them through e-mail to try to, to basically sell the products that are on your site?
Adrian: Yeah, so essentially we recently adapted that strategy to focus more on Facebook Messenger, because we found it’s just been amazing for us. So essentially what happens is somebody clicks on a link for a free drum kit. They are prompted to subscribe to our Facebook Messenger Service and then they click on the button. It sends them back to Facebook Messenger and then an automated message comes up asking them to also submit their e-mail where we’ll send the free product. So it’s kind of like a two in one situation where we get …
Adrian: Both the Facebook Messenger subscription and also their e-mail, so that later on we can promote to them through two different channels.
Felix: Right. Yeah, I think e-mail obviously makes a lot of sense to people. That’s the way that they’re conditioned to signing up to get contacted by businesses. Do you find that customers today also get the idea of essentially subscribing to a Facebook Messenger like list or bot or have you found customers that are confused by how it all works?
Adrian: There definitely are some customers who are still confused. It’s still kind of in the infancy I guess bot marketing. But more and more we’re noticing that even as we’re sort of training and engaging with the audience through Facebook Messenger, that they’re embracing the concept. I think initially we had obviously some skepticism. Some people were confused by the whole thing, but honestly, as long as you engage with them in a meaningful way and you’re not just spamming them with promotional messages, I think it can be a really powerful tool.
Felix: Yeah, let’s talk about how you engage with them? Is their approach to Facebook Messenger marketing similar to e-mail? Like can you take the e-mails that you’re already sending out and just kind of put them into Facebook Messenger, or do you need to create something that was native to that new channel?
Adrian: I recommend definitely creating something native, just because certain things don’t translate that well and also Facebook Messenger Marketing needs to be kept a lot shorter. You can’t really send a whole long story e-mail with something like that. With that being said, you obviously need to boil down what you’re trying to say into the essence and I found that through Facebook Marketing, obviously, people resonate more to images, to emojis and stuff like that. Things that don’t necessarily translate as well through e-mail. So I think just keeping the tone as conversational and as natural as possible and being concise in your message. Not overwhelming people with information.
Felix: Right, so when you say conversational, are you trying to get them to engage in conversation back with you?
Adrian: Yeah, we do. We usually ask our audience questions. We provide information and value and the idea is to start a conversation because I think that really helps with the whole community building exercise. If you’re just a faceless corporation just sending out information, then people end up tuning out. Whereas if they feel like they’re being listened to and they feel like they’re having a stake in what you’re putting out and what you’re creating, I think that’s infinitely more valuable.
Felix: Right. Do you have any examples of messages or types of messages that you have found to be the most effective to begin that conversation with a customer?
Adrian: Yeah, so initially we tend to run people actually through an automated system where we’re asking them questions about what kind of products they enjoy the most? What they’re looking for? And that really helps to provide the sense of community creating content together, instead of us just creating content, pushing it out there and then hoping people enjoy it. So, for example, I would send an initial message asking them which of these product types do you use the most and it would be for example drum kits, sound tools, loop packs and so on. And then depending on what they select, it would ask them about specific questions concerning what kind of loop packs, for example, they like the best, or what they would like to see more of. And then eventually I will end with an open-ended question where we then manually reply. So, for example, it would be something like what are your personal goals as a music producer or something along those lines?
Felix: Got it, so kind of like multiple choice or maybe two options answer questions at first. Low kind of commitment. Easy to answer and then once they’re kind of getting into this flow of answering you, then you ask the open-ended question, which you can continue to carry on an actual conversation like manually with someone on your team?
Adrian: Absolutely yeah. So that really helps us in identifying what our customers want and need and especially the open ended questions at the end let us sort of tailor an answer to specific customers. So for example if one customer is saying, they really need help with mixing and mastering, then we can direct them to our mixing and mastering blog article. Or we can tell them about our subscription program that teaches mixing and mastering. So obviously it’s a great way. It’s a win-win situation in a way because the customer is getting exactly what they want. And for us, it’s great, because we can really drill down on providing the correct product to the correct customer.
Felix: Hmm. Is there anything that you know just doesn’t or you haven’t been able to figure out how to make it work with Messenger, that you’re just going to continue to keep on e-mail?
Adrian: Hmm, we’re still experimenting. There’s like a few caveats. For example when it comes to segmenting your list, so right now we have a pretty big Facebook Messenger list, but it’s really hard to drill down on. For example, people have already bought a certain product. Whereas with e-mail marketing for example through Mailchimp, integrated with Shopify and things like that, it’s a lot easier to segment lists.
Felix: Got it, so just to go over the stats again, you said the e-mail to your subscriber list might get between 10-15% open rates and 2-5% click rates, which is definitely on par with industry standards, but with Facebook Messenger you’re getting more in the realm of 80-90% open rates and 10-20% click rates. This is also equated to sales, like you’d get a lot more likely to convert customers through Facebook Messenger, than through e-mail?
Adrian: Yeah, actually we’ve found that our conversion is a lot better through Facebook Messenger too, so we’ve definitely enjoyed using that vehicle.
Felix: Got it, makes sense. So I want to talk about this subscription model that you’ve come across, so you mentioned that today a major part of the business revenue comes from the subscription, which is to the Platinum Circle. Which makes it a lot more scalable format and you mentioned that you wish you did this sooner. So what made you decide to go the subscription model route?
Adrian: So I think one of the most important financial backbones of any business is recurring revenue and if you’re 100% reliant on your day-to-day E-commerce sales, that can be really hard for planning for the future. So I think I noticed especially from my music production business too, that introducing a subscription model was not only really beneficial to us financially, but also made it much easier for us to forecast sales and to be just more on a sound financial backing. So I literally just translated that model over to Modern Producers and started the Platinum Circle, which is our subscription program where for a set monthly fee, essentially customers get the top 20 kits we release every month and it kind of turned out into a win-win situation, because the customers were saving a lot of money and vice versa the program was attracting a lot of attention, which meant a lot of subscribers. And great profits for us as a company too.
Felix: Right. Was it harder to get that initial sale? Get someone to sign up for this subscription versus just kind of a la carte where they come in and buy pieces here and there?
Adrian: Yeah, it was definitely tricky, but actually, I don’t know if you know him, but I follow Russell Brunson.
Adrian: So I pretty much just followed his teachings and honestly that changed our business for the better and we just introduced a really compelling stack, so aside from the products we also offer a private member’s group for interaction with our customers and helping them with their personal goals. Also mixing and mastering tutorials. Access to placements. Access to beat sale opportunities and things like that. So essentially everything that an up and coming independent producer needs all bundled up into one package and yeah, that’s just done incredibly well for us, so, the only regret I have is that I wish I had started that whole system much sooner.
Felix: Right and yeah just to kind of elaborate more on the stack. You’re basically trying to create what Russell Brunson calls irresistible offer by putting so many valuable things that it becomes such a great deal that you really can’t say no. So when someone wants to create an irresistible offer for their customers, how do you decide what should go into that offer?
Adrian: It’s just a matter of listening to our audience and also understanding what we needed ourselves when we started out. So aside from having the right sounds as a music producer, there’s also a whole lot more that goes into it, which is having access to the right network of people. Having the opportunity to have your products displayed to other people. For example, getting access to the big labels and the big artists and me personally obviously I have a lot of those connections. So it was simple for me to make those available to our subscribers. And actually one of the big perks of being a subscriber is that you’re able to submit beats to the big labels and to big artists and also to TV and film opportunities. And we also have a private member’s group where if producers have any specific issues or they need feedback, or they want to share information, they can do that through there. So it’s almost like an entire support network, outside of just a product.
Felix: Got it. Do you follow the kind of idea, like the value ladder where you are trying to get them, or at least you’re offering higher and higher levels of service to your customers at obviously higher price points?
Adrian: That’s definitely the direction that we want to go in eventually to provide a more “done for you” approach at a higher price point, but at the moment our business is just focused on the day-to-day training and then every once in a while we’ll have one of our product launches where we often sell a big package of bundled products for sort of a low cost.
Adrian: And then obviously the subscription system. But definitely what we want to be in the future is to provide more comprehensive one-on-one training where we literally you know take producers to the top of the industry by providing them all the training, all the networking and things like that that they need.
Felix: Got it. So I think this is an approach that a lot of people take which is to sell a la carte, one product at a time and then move into a subscription model. Talk to us about the launch for this. How did you introduce it to your customers?
Adrian: Yeah, so initially what we did was we did a product launch almost for the subscription system. So we started off with a 30-day pre-launch where we did daily videos and content and just started building authority. Not just as a provider of products but also as a provider of services and information to the music production community. So we would almost overwhelm our audience with free information and providing really valuable content and giving them tips and tricks and things like that. And that really cemented our place as sort of leaders in terms of guiding producers, not just giving them tools, but also giving them access to everything else they need. And then eventually when we did launch the product, our entire audience was already hyped. We’d already established ourselves as knowing what we were talking about and everyone kind of jumped on the opportunity when they saw how much of a great deal it was.
Felix: Do you remember how big the list or the audience that you were promoting too was at that. Basically how much, what can you expect in terms of how people might want to convert into a subscription service?
Adrian: Yeah, I think at that time we had somewhere like 15,000 to 20,000 subscribers to our e-mail list. Back then we weren’t using Facebook Messenger Marketing or anything like that. It was fairly streamlined and simple what we were then. And out of those 20,000 people I think we had something initially like 500 people subscribe to a $29.99 program. Which to us was already amazing at the time because we felt like this was all revenue we were leaving on the table previously and obviously the $29.99 initially it translates eventually into $29.99 almost over the lifetime of the customer.
Adrian: We understand very few people who drop out, so that’s definitely been super valuable.
Felix: Yeah, how do you keep that churn rate low? What do you find has been the most effective in getting them to stick around?
Adrian: Honestly the most effective thing is just creating a constant high value and a lot of product. So I mentioned the, obviously, the Member’s Group, the Private Member’s Group, the only way to join is through the subscription and essentially usually once the producers join the group, they realize that they love all of the content that’s on offer there. We have a lot of bonus content. We have a lot of interaction. We have contests and giveaways specifically for our subscribers. And they just start to get a sense of community within this private group where they feel like they’re a part of the movement. They’re interacting with the other producers. They’re doing collaborations and stuff like that. So while initially, I think what attracts people into the program might be the idea of saving a lot of money on products. I think really what retains them is becoming a part of the community and not wanting to give that up.
Felix: All right, that makes sense. So you said that to do this launch you were giving basically 30 days of tons of information to build the authority with your audience. How did you create this 30 days worth of content, which is a ton. So how did you set this up and build it in a way where you weren’t going crazy with all this content creation?
Adrian: For sure. I mean obviously planning and organizing helps a ton. So I think maybe two or three months before the launch I started thinking about things and creating content. But then also when I say daily content, I don’t mean you need to post a full-length blog article every day or something like that. It can literally just be a tip of the day or a short two-minute video just giving people some actionable advice. I think what’s really important is to keep it actionable. So don’t be super vague, but actually, give people something to do right now. For example, here’s a trick to improving your e-mail open rate. Here’s some great headlines that work for us or something like that. That people can go away. They can use it instantly. They can see it’s working, so that they understand that what you’re telling them is not just grab from thin air.
Felix: So these are like music business related or are they like music like production? What kind of content were you producing?
Adrian: A little bit of both. So our audience, our music producers which essentially means that they create music and they try to sell that music to other artists, or they try to get licensing deals or something like that. So we give them tips on both the creation of their content, but also tips on how to actually sell their content and get in touch with customers. Make more sales and things like that. So it’s essentially like a two-pronged approach. The one side of it is becoming better at their craft. The other side is becoming better business owners and entrepreneurs in their own right.
Felix: Right, that makes sense. So when you are getting them in as membership, it sounds like the kind of kit saying, the product is what might hook them at first, but they end up sticking around because of the community and of the value that they’re getting by being part of the network?
Adrian: Absolutely, yeah. And actually today a lot of our subscribers come from word of mouth, which is literally people in our community wanting to bring their friends into. So at that point, it becomes equally as important to promote the community as it does the products.
Felix: Got it. What is your kind of, your scheduling like when it comes to curation or product development when you have to constantly put out new products to your subscription service?
Adrian: Yeah, so as I mentioned we have over 70 vendors now. Which means we actually have a lot of content that is just created by those vendors for us and by the way, barely any of the content that we sell is exclusive. So we work with vendors who create content and then send them out to us, but also send them out to other websites. We just pride ourselves on obviously marketing their stuff better, so we make the more sense. But I think working exclusively with content that’s just created for you is difficult because as you mentioned obviously a lot of organization and planning goes into it. Whereas if you just have vendors who are creating content independently anyway and just sharing it with you, the whole process becomes a lot simpler.
Felix: Okay, so when you’re working with vendors and you’re just selling on the site, you’re basically taking a cut of the sale. But basically, you’re not like buying the rights or anything from these vendors and selling it and kind of taking the risk of selling it in that scenario. But when it comes to the subscription service how would that work? Like do you, how do you decide how much the vendors get paid essentially? You don’t have to go into exact detail, but if someone had a same situation as you, how does that even work?
Adrian: Yeah, so first of all the content is obviously the same, so it’s the top 20 products that we release per month, also get added to the monthly download photo for our members. Now the way that the revenues get shared out is that it’s an equal share according to how many products a specific vendor has in a monthly package. So say that one of our vendors has, for example, five products out of 20, that means he would get a 25% share and then we obviously take a 50% cut as the distributor. So that’s the same agreement that we have just selling the vendor’s content on our website.
Felix: And vendors are pretty receptive to this or do they have to, or is there some negotiation involved to get them to agree to be a part of the membership service?
Adrian: Actually so far it’s been 100% positive. No one so far has said they don’t want their content in the subscription service. And we’ve actually found that we’re making a lot more money for our vendors than even just the standard sales through our websites. Obviously, it’s a much more concentrated amount, because say for example they have like I mentioned 25% of the marketing package and say we have 500 subscribers. That could be several thousands of dollars that they’re getting also of recurring revenue every month.
Felix: Right, makes sense. So when you are getting a new customer from someone who is coming to the site and buying a drum kit or something. At what point do you introduce them to the subscription service?
Adrian: So we actually do a monthly enrollment period for the subscription service right now. Though what we’re essentially trying to move towards is almost like an e-mail automation sequence and a Facebook Messenger automation sequence where initially there’s some degree of just establishing ourselves. Talking about myself and our company. And then eventually transitioning to selling them on the subscription system. So this is something that we want to roll out for every new subscriber because we’ve realized that actually what’s most valuable to us is to get people onto the subscription system instead of just buying a one-off product and then possibly disappearing for months or years, you know?
Adrian: So that’s our strategy going forward. At the moment it’s just once a month we basically open the registration for four days to create a sense of urgency and we send out a couple of e-mails to our existing e-mail list and also obviously promote on our social channels and then the producers that want to get in, get in in those four days. And if they miss the margin they obviously have to wait until the next open enrollment period.
Felix: And you do that monthly?
Adrian: At the moment yeah, we do that once a month.
Felix: Got it. I’m glad you brought that up because it’s not like an open subscription service that anyone can join at any time.
Adrian: It’s not currently no and when we do roll out the e-mail sequence, what we’re planning to do is basically to create some urgency through, I don’t know if you know Deadline Funnel?
Adrian: To basically set up an independent timer for every new customer, where they have let’s say for example five days to decide if they want to join or not.
Felix: I got it, so it’s ongoing rather than having to do like a cohort or a batch of people at one time.
Felix: Makes sense. So you mentioned that you are still the head of the independent music production company and I believe you referred to Modern Producers as a passive income stream, but it sounds like you’re very actively involved in lots of things going on. What have you put into place to make it a little bit more passive? To make it, the business a little bit more automated?
Adrian: I mean fortunately with Shopify, everything is pretty streamlined and simple. There’s a ton of amazing apps and tools that you can use straight out of the gait. And obviously for us, selling digital products that makes things a lot easier, because you can just have those automatically delivered to your customers. So there’s no order fulfillment. There’s no shipping or anything that complicates a lot of businesses. So being a digital download E-commerce platform, essentially everything runs itself. The customer goes to the site. They but a product. It gets sent to them instantly and automatically they download it.
Adrian: And then the only thing we have happening after that is some degree of customer support, so if a customer can’t download the product correctly or he doesn’t know how to install it. So that’s the only real work on a day-to-day basis. That and obviously creating the new products that we put out. But again since we are not creating any of the content in-house it’s just a matter of creating a new product page. Which is you know a five to ten-minute job at best.
Felix: Uh-huh, so what, what …
Adrian: The other side of it is obviously growing the business and that’s the, oh no go ahead.
Felix: Oh no, I was just going to ask you, so what apps do you use to, that you rely on whether they’re on Shopify or off Shopify that help with this, with running the business?
Adrian: Yeah, so outside of Shopify the main things we use is Mailchimp for e-mail delivery and we use Minichimp for Facebook Messenger and obviously ClickFunnels, just because I love Russel Brunson. He really helps us with the subscription programs and doing the one-off product launches. But when it comes to Shopify specifically there are a ton of apps that we use. Some of my favorite ones are SendOwl for digital download deliveries. We also use Boost Sales for creating up sales and cross-sales just to sort of increase the average order value on our site, which is very helpful especially if you have a lot of content on the site. I also use Countdown Timer Bar, because I’m a big fan of creating a sense of urgency, so whenever we have a special bundle of products or maybe the enrollment period for our subscription program is coming up, then I use a sort of push down Countdown Timer Bar that’s on.
Adrian: And we also use Refersion for our affiliate program which has been pretty well in growing nicely for us. And then most recently we actually wrote our first-ever loyalty program through Smile, so that’s something I’m kind of experimenting with to see how that does for us.
Felix: Awesome. So I’ll leave you this last question, what would you say needs to happen this year, in 2019 for you to consider the year a success?
Adrian: So my personal goals are to create more self-made entrepreneurs. I think I mentioned that right at the beginning. So if at the end of the year I can look back and I can see that a bunch of producers achieved great things. They worked with the artists of their dreams like I did back in the day. They created amazing content and they’re happy. Then I feel happy and content, so honestly, to me, it’s all about servicing this independent music community that we’ve sort of established as our target audience.
Felix: Awesome. So modernproducers.com is the website. Thank you so much for your time, Adrian.
Adrian: My pleasure. Thank you, Felix.
About the author
Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs. Got something to share with Shopify Masters listeners? You can submit your story for consideration.